SPA3 Investor May 2023 Re-Optimisation

Products SPA3 Investor
1

Hi All,

As per the email you should have received yesterday, and as Gary announced back in March, the SPA3 Investor Re-optimisation and Universe additions were released yesterday.

If you haven’t already, open BC on your computer, wait a few minutes and then restart to begin the upgrade process.

The 2023 Re-optimisation mean that all stocks will have an new set of historical signals, which means that some trades that were OPEN under the old parameters are now closed. This transition is a once off event, the SWS APP and scans within BC are accurately showing the current (correct) signals.

A quick summary of the release email and White Paper:

  1. Newly Optimised Parameters released for ASX and USA, Stocks/Indices/ETFs
  2. 17 additional Stocks added to ASX universe
  3. 23 additional Stocks added to USA universe
  4. BAPs are now DISABLED by default for both ASX & USA SPA3 Investor scans
  5. Stock Filter is now DISABLED by default for USA Stocks only

Due to point 1, there are 3 ASX Stocks that are now CLOSED that were previously open prior to yesterday’s release:

  • BHP
  • QAN
  • JBH

There is also 1 Stock on the USA that is now CLOSED:

  • FCX

According to the SWS Public Portfolio investment plans, any stocks that were previously opened but are now closed after re-optimisation will be sold immediately. Members should take appropriate action in accordance with their personal investment plans.

There are also 3 Stocks that will no longer be in the SPA3 Investor universe moving forward:

  • ORG.XASX (Origin Energy Limited)
  • TLS.XASX (Telstra Group Limited)
  • NKTR.XNAS (Nektar Therapeutics)

These 3 are still OPEN in the old parameters, and as they give their individual SELL signal, we will notify customers, and once closed, they will have their (Old) signals removed. You can also monitor these individually via their respective charts in BC.

CELG, AGN & ATVI are historical delisted/mergers that have also been removed from the USA universe.

Finally, there are a number of supporting Simulations located in the White Paper that were used in research to make the relevant decisions discussed above. Old Parameters vs Optimised (New) Parameters, as well as BAPs vs no BAPs Simulations are shown.

If you have any questions - please don’t hesitate to ask.

2

Thanks Karl,

It’s a shame that JBH being a closed trade wasn’t highlighted in yesterday’s presentation. Because its exit signal happened on Monday and I do one day scans for exit signals, I only realised that it should have been sold when I saw the app signal update last night. Unfortunately JBH has had another big down day today before people holding it could sell - quite a few dollars involved.

This is clearly a lesson to be learned for the preparation for future system update releases.

Regards
Don

3

Hi Don,

JBH gave a SELL on the old parameters last night (24th May) - meaning that if we hadn’t released the new parameters yesterday, those that held it would have been exiting today regardless.

Unfortunately, with the benefit of hindsight, it would have been ideal to have had everyone exiting their position on Tuesday, however the new parameters were not released to Customers. Announcing a preemptive SELL with no signal or alert in the APP would have caused more confusion than not, and is not part of our release process.

Fortunately, the outcome was no worse off than what we would’ve had with the existing parameters, something we must accept and look foward to the future trading the re-optimised expanded universe.

Kind Regards, Karl.

4

Karl,

On Wednesday morning, JBH was an open trade under the old parameters but a closed trade under the new ones. My point is that therefore it should have been included in Wednesday morning’s presentation in the small list of stocks in that situation which were highlighted. The recommendation was to sell any open positions in those stocks, as I did for QAN on Wednesday. Such omissions have consequences and this time they were negative for me - another time they may well be positive.

Don

5

Thanks Don,

Your feedback is noted.

Thankfully these kind of releases are a rarity.

Karl.

6

Hi

What was the basis of buying IGO. The buy signal occurred on 23 May 2023 with an action date of 24 May 2023, the public portfolio bought the shares on 25 May 2023?

Thanks
Paul

7

Hi Paul,

Gary messaged the team on this one last night. He is currently overseas - and the timezone in combination with the changeover in APP (no BAPs) caught him out, he thought he was looking at a current BUY - not realising it was a Tuesday signal.

He has made a “Trading Error” Journal note against the entry in PM and we are awaiting confirmation from him that he will exit the position today.

8

Thanks Karl

It’s the only stock in the portfolio doing well today lol… the market hasn’t liked FPH’s result

9

Ouch - hadn’t seen that one yet!

10

Hi,

I’ve just noticed that the settings on the AUD/USD hedge signals have changed quite substantially recently. They are now generating less frequent signals and most noteably the two recent whipsawed loss trades are no longer there. Were the hedge signals reviewed as part of the re-optimisation work or has something else been done or happened?

Regards
Don

11

Don,
Yes, the AUDUSD was also reoptimised as part of the project
Regards,
Gary

12

Thanks Gary.

That’s a welcome review because although I’m ahead on hedge trading overall the recent losses were signficant - I had been wondering if the signals were being generated too quickly.
I look forward to hearing more about the details of the results on this and the rest of the re-optimisation on your return.

Regards,
Don